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Published on Jun 08th, 2023
Despite facing challenges with customer retention, DocuSign has seen growth in
the number of high-spending customers and its international revenue. As of their
Q1’23 earnings call, customers with annual spend above $300K grew 32% year-
over-year to a total of 886. Dollar net retention for the quarter sat at 114%.
International revenue grew faster than domestic—43% year-over-year to $144M.
Adobe
Similarly, Adobe has its own CLM solution that is a part of Adobe Document
Cloud. Adobe Document Cloud and DocuSign are closely matched in terms of
annual revenue, but Adobe's CLM services only account for a fraction of its total
revenues.
Adobe Document Cloud revenue for 2022 was about $2.38B—about 13% of
Adobe’s total revenues of $17.6B.
TAM Expansion
The size of the addressable market for contract lifecycle management
companies was estimated at $20B in 2021, and growing 30% year-over-year.
The growth of Icertis's underlying CLM software market is being driven by the
broader digital transformation trend (as accelerated by COVID), the growing need
for operational efficiency given tightening economic conditions, and the rising
importance of compliance and risk management.
Digital transformation
An Icertis survey found that 67% of 500 executives at Global 2000 companies felt
like their digital transformations were not helping them get ahead of their
competition.
But as more and more companies do invest in their digital transformations,
they're turning towards software to improve their operations, and contract
management is a critical area that benefits from digitization, driving increased
demand for CLM software.
By automating their contract management through CLM software, companies
can grow their contract velocity by 80%—63% of companies that use CLM say
their negotiations are more profitable and proceed faster.
Operational efficiency
Contract management, being a labor-intensive process when done manually,
represents an area ripe for improvement when it comes to operational efficiency.
Across large companies, a McKinsey report pegged the cost of “leakage” due to
unmet obligations embedded in contracts at 2%—the equivalent of $20M per year
for a company spending $1B per year.
That’s added to the 5-40% of contract value that companies can end up throwing
away every year by not incorporating features like rebates, volume discounts and
price adjustments into their contracts.
Compliance costs
Regulatory environments are becoming more complex, and businesses face
higher risks related to non-compliance with contracts. CLM software helps
manage these risks and ensure compliance by providing visibility and control
over contracts.
Without CLM software, humans are required to stay on top of all the clauses in a
contract, and missing one can expose companies to severe reputational and
financial losses. One public company that Icertis worked with faced a customer
lawsuit due to an oversight like this—and the company was forced to pay out
millions of dollars to remedy the situation.